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Re: Toofuzzy post# 33781

Tuesday, 02/15/2011 4:41:07 PM

Tuesday, February 15, 2011 4:41:07 PM

Post# of 47075
Is there a chart of gold vs S+P 500 and would it be worth AIMing one against the other (use gold as cash?)

They are both aproxamately the same price so I thought that would be interesting.


Hi Toofuzzy,

In theory I suppose one could. However Lichello was looking for the cash component to be of fairly constant value, with the stock part being the variable side. AIMing two variable value components might work if they're close to 100% non-correlated. Anything that's reasonably correlated would be more likely not to work - think of the 2008 "black swan." I believe in the book someone had suggested diamonds for the cash part and Lichello nixed that idea.

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